Charles E. Bradley Jr. - Chairman of the Board, President and Chief Executive Officer Jeffrey P. Fritz - Chief Financial Officer and Senior Vice President

John Hecht - JMP Securities Daniel Furtado - Jefferies & Co. Sean - Wells Capital

Welcome to the Consumer Portfolio Services Second Quarter 2008 Earnings Release Conference call. Today's call is being recorded. Before we begin management has asked me to inform you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact maybe deemed to be forward-looking statements. Such forward-looking statements are subject to certain risks that could cause actual results to differ materially from those projected. I refer you to the company's SEC filings for further clarification. The company assumes no obligation to update publicly any forward-looking statements whether as a result of new information, future events, or otherwise. With us here now is Mr. Charles Bradley, Chief Executive Officer and Mr. Jack Fritz, Chief Financial Officer of Consumer Portfolio Services. I will now turn the call over to Mr. Bradley.

The overall performance is just at what we would expect it to be unfortunately it’s in a very trying environment in both our industry and the overall capital market as a whole. So I think, the thing to focus on is what we do to sort of take advantage of all that. In some ways, for people who have been with the company for while Déjà Vu ten years ago. 1998 was something exactly like, it was certainly with the auto market versus the overall market, but that point being that our company has been there before, we know what we are doing, we know how to handle it and manage our way through it and as people might remember, you can do that, that will create lots of opportunities going forward and so our focus, as we’ll talk about a little bit. Its to sort of manage our ways through these difficult times take the time we have to take it to sort of make things better, improve things and then when things coming back, whether its three months, six months or a year from now to be in a position where we can take real advantage of the opportunities that preserve themselves. With that I will turn it over to Jeff to go through the financial.

That’s Brad. Good morning everybody, we will start with the revenues. The revenues for the quarter ending June 2008 were $98.8 million, that’s down 4% from $103 million of the March ’08 quarter and up about 3% from $95.8 million in the year ago quarter. The first six month of 2008 had revenues of $202 million that’s up significantly from the last years six months through June of ’07 of $182.3 million, and a lot of these period-to-period comparison that we’ll see this morning, you are going to see the outcome of what’s really happens in the marketplace over the last year. So throughout ’07 you recall, we were able to grow originations pretty steadily up through and until the fourth quarter and since then we’ve significantly reduced originations and as a result of that our portfolio is greater today then it was year ago. However, it’s less than it was a quarter ago, and so we’re in currently in a mode where the portfolio is shrinking and a lot of the things that are driven off besides the portfolio are going to reflect to that circumstance. Turing to the expenses, the expenses for the third, excuse me the second quarter $96.1 million, that’s down 3% from the pervious quarter, the March quarter of $99.5 and up about 7% from the $90 million end of June quarter of 2007. Similarly the six month expenses for ’08, $195.6 million, that’s up about 15% from the $170.6 million in the first six months of 2007. Looking at the provision for loan losses $30.9 million towards the quarter ended June of ’08. That’s down about 11% from $35 million in the March ’08 quarter and also down about 33% from the, excuse me down about 6% from $33 million through the June ’07…

Thanks Jeff. I’m talking about the credit performance. It’s still lower than what we would expect. The DQ numbers for this quarter were 6.12% for the June quarter. I’ll talk a little bit from 4.8% or 4.82% in March for the previous quarter and 4.85% from the year ago quarter. In terms of delinquency, we now have a declining portfolio and so there is probably two effects, one is that that the portfolio is now starting to decline, also that the ’06 and ’07 vintages which all along were not quite as good as the earlier years, the ’04 and ‘05s, those are now reaching their peak loss periods. So we would expect the delinquency process this summer, but overall delinquency is certainly where we would expect it to be and well within reason given the portfolio. In terms of the losses, the losses were 6.85 for the quarter. It compares to 6.66 for the previous quarter and 4.13 for the year ago quarter and again it’s a same thing and that the portfolio is beginning to age. Those two large year originations are ’06 and ’07 and are now reaching their peak loss period and so we would expect the losses to go up some, but again this is exactly were we would expect it to be. If anything given this overall environment, we’re probably rather pleased with the performance in terms of collections given the economy and everything, but talking about how bad it is I think our portfolio has done rather well certainly compared to our peers. I mean our ’06, ’07 vintages are only up about 10% or 15% from where we might have expected them be or the ’05, ’06 vintages. The rest of the industry is somewhere between 25% and 50% increases on a…

(Operator Instructions) Our first question is coming from John Hecht of JMP Securities. Please, go ahead.

Just a couple of moderate questions. You issued some new shares for a group associate with Levine and I think there was some loss. What should we consider for pro forma share count in terms of additional shares that we need to include in the diluted share count?

Hi, John. In the aggregate the new potential shares from the financings are the additional $5.5 million that you would want to put into the diluted, starting with this quarter’s diluted share count. Now on a year-to-date basis they’ll be sort of averaged in but the aggregate new shares are 5.5 and above.

Okay, and the -- subsequent in the quarter you raised more senior debt. It was five and change at the end of the other quarter, how much will that be at the end of the third quarter?

Well, the base amount of the new debt that was on the balance sheet of June 30 was $10 million. Subsequent just last week we finished off that deal with an addition of $15 million.

Okay, and then can you tell me -- just remind me I guess with Citi corp I think there are two pieces of that financing line of the revolver and the permanent, can you just remind me when were you given the updated terms when things reset and have to be renegotiated to get in, which pieces fall into which bucket?

Sure. I mean the old deal has a $60 million revolver and $60 million term and at a time we had draw half the revolver in the full term. The revolver was due about a week or 10 days ago and then the term was due from a year from now and so what we’ve done is we’ve eliminated the revolver. We have increased the term from $60 million to $70 million and then a year from now we have the option or if we have met certain conditions we can extent that debt an additional year, and so net of all that we have at least a year where we don’t have to anything, and then the extent then goes the way it’s supposed to. Its two year before that 70 is due and there’s so many amortization between now and then. The fundamental part of what we wanted to do is given the current economic environment we didn’t really want to -- we’re not sure. Anyhow hopefully by next year everything will be great but if it’s not we want it to be in a position where we could leave that debt loan for yet another year.

Yeah I understood, and can you give some commentary on the capital markets. You expect them and you’re planning the business strategically around them continuing to be tough, but can you give us a sense more about just over the new few months what deals have to done and senior sub fashion for instance, how do you just get that feel on pricing and anybody in the industry is going to address warehouse lines in the near future, what do you expect with respect to changes associated with covenants and details associated with those and how are you kind of playing your business strategically around those developments?

That’s a good question. I think America did deal I think a month or so, that one really well, so the capital markets are a little bit fickle in terms of when they are strong and whey are weak. Some people think they could get a little stronger in the fall, some people think it’ll be another year. Again our current strategy is to plan for the worst and I assume hope for the best. I think personally there’s another company that did securitization this week, so I think the market should begin to open up between now and the end of the year. Whether it will be a stronger market than it was for America to do their deal or hopefully stronger when we did our deal in April, it’s a little tough to pick but one might guess you can get securitizations done hopefully before the end of the year given that -- and a lot of its done in the senior sub fashion or with a wrap, my guess at the moment is you might reemploy the senior sub, but again a lot will depend on sort of what’s happening in the industry. In terms of our credit lines, credit lines aren’t due until September or November. I think we are going to be in a position where we should be able to work with those lenders; they might be -- one of the relevant things that we probably need is large lines at that time to the extent when we were doing we would probably scale them backs some. I think they might be slightly more expensive returning on the market but that’s sort of the plan for now. We would expect that the capital markets hopefully would strengthen this fall, but again it’s much more sort of my personal feeling than either the way we’re going to plan for the company or the way that it really may happen. I think there is lot’s of opportunities that there seems to be an appetite for people looking for assets and so that creates other way to sell things. I think we’re going to be opportunistic and take advantage of what we can see. The important thing is all of those people that are in doing the capital markets, doing the securitization or other loan sales or whatever they senior staff or otherwise, what people are going to look for is performance and that’s going to our strong suit for the rest of this year or next year because our portfolio is going to do well and so we’re going to have to see, but I think given the economic environment and how well our portfolio has performed so far that should be something that sort of leads the way in terms of how we do things. That’s again -- it’s a little hard to guess given part of when the markets going to shape up over the rest of the year.

In USA, the auto men did it senior sub.

Thank you. Our next question is coming from Daniel Furtado with Jefferies. Please go ahead. Daniel Furtado - Jefferies & Co.: Can you tell me what the current age of the portfolio is right now?

It’s about 18-months at June 30, and I think Brian mentioned the portfolio is going to be 18, that compares to about 14 months at December 31, 2007. Daniel Furtado - Jefferies & Co.: Okay. And what’s the cumulative loss on that portfolio to date?

Well, the couldn’t give that cumulative losses of that whole portfolio, because we would look at it in quarterly or monthly pools, but our target loss is for really everything expect the ’08 originations would be in the 12% range and then for the ’08 originations, we’d expect cumulative net losses to be significantly less maybe in the 10% or 11%. Daniel Furtado - Jefferies & Co.: Okay. I’m just trying to figure out on that 12%, what's been recognized? What the experience has been to-date? Are you in the 8% of that 12%. Assuming no more originations and you just let this thing run off, you think you’re at that eight of 12 or six of 12 or 10 of 12, what do think cumulative losses in the portfolio are right now?

We’ll probably have to look at that and give you a better number rather than just guess that one now, we can do that for you. Daniel Furtadop - Jefferies & Co.: Okay, I appreciate that term, and how should I think about allowance for losses. Should I think of it as a percentage of the portfolio or some other metric and what do you suggest that outside is looking in?

It’s again you have to consider sort of as the portfolio ages the allowance as a percentage of portfolio is not necessarily going to stay there at a fixed amount of tax, it’s decreased somewhat over the last few quarters and we’d attribute that somewhat to the lack of significant new originations and the aging of the portfolio. As a portfolio ages and sort of moves out on this cumulative loss we can sort of picture a cumulative net loss occur as the portfolio ages and moves up to curve from 14 to 18 and maybe some higher number of months. The cumulative net loss tends to flatten out a little bit and so therefore, looking forward says for the next l2 month losses you would have potentially a decreasing number and so that will impact the amounts. Although the allowances percent of the portfolio has shrunk similar, if we also maintained a separate allowance from the re-inventory portion of the portfolio and when you aggregate those numbers together it’s been pretty flat over the last few quarters. Daniel Furtadop - Jefferies & Co.: Okay and usually your net charge outs increase about 200, points from the second and the third quarter over -- I thought you’ve been pretty predominantly on balance sheet. Is there anything to suggest that this third quarter will deviate from that, a typical increase?

We might want to an analysis on that but probably not would be my guess. Daniel Furtadop - Jefferies & Co: Okay, how about economics stimulus checks, is that something that you think has been beneficial or you can’t track it, or what’s your gut feel on that?

My gut feel is, they should have showed up two months ago, they don’t seem to have showed up yet. I think the fact; ironically this month looks like it might be getting some effects from that. I think that, probably the question will be answered better next quarter, but July generally not a great month and it’s only half over give or take, but it seems to be sort of having an interesting perk to it. Daniel Furtadop - Jefferies & Co: I heard earlier, you’re thinking it was 15 million to 20 million in originations on a monthly basis going forward. That's fair for me to use in my model?

Sure, that will be fine.

Sean – Wells Capital.: Hi, this is actually Sean for Cheryl. I was kind of curious obviously you guys are making concerned efforts to use to drive on your exposures. I was just kind of curious to what degree just put your traffic is also having an influence on that or have you seen this, because you’re drawing down, these aren’t alternatives for your traditional customers? So, trying to get more of a macro sense what’s happening at the dealership level?

I mean that’s also a good question. I think dealerships were in tough shape. As much as people could say, gee everybody is charging a lot for these loans, but as much as our industry now is starting to back off, the rumors we hear is that the auto dealers are having trouble that it hurts their business significantly, the fact that they are having trouble selling new cars isn’t particularly great and now all of a sudden they are having trouble financing used cars. So that’s put an increased burden on the dealership. Then they even go to the next step, which is to the customer, a whole lot of people that used to be able get financing gear, given it all time credits, are now going to buy here, pay here was they are literally paying significant amounts for half the car per sale. I mean to buy that, our industry has almost created as the bridge between buy here, pay here and regular time financing, and as we find and sort of drawn in, a lot of those customers are now falling in where they’re actually paying more. So, I think concerned on the very basic level of people with poor credit or bad credit, its hurt them significantly, it’s hurt the dealer significantly and obviously it’s had an affect on the finance company. The good news all that is, like I said one of things more of our current objectives is to work with the dealers to sort of given of course and how to really, get these customers in, constructor their deals better, so that we sort of have stronger partners as we go forward and the other part is, when the market comes along and we can offer that financing, I think that’s were the dealers and then the customers will all be there to really, grow this market back to where it was and I think the stronger companies will do very well. Sean – Wells Capital: What degree do you think the cap just are performing well or forward regards to our standards are they still maintaining standards or is everyone just in general tightening?

I think the cap is to go that one that one next level. The cap has really backed off in terms of what they financed a while ago and I think they’re maintaining that. They haven’t been -- as much as they might be tempted to reach down the credit spectrum a little bit to try and reach their business. I think they learned three years ago that really doesn’t work and so this time around they kind of stayed away from that. So, I think they had maintained their discipline. We haven’t seen a lot of the captives really trying that hard to or we haven’t really seen it at all in terms of them trying to help the big company to sell more cars, which I think is the better move. I think all they would be doing is gearing themselves. It’s always a steadfast rule through history is that prime guy should not be financing sub-prime and keep them where they should be and keep them -- at least try to get them healthier, they shouldn’t do it and they haven’t, so we have not seen them reach down.

Thank you. At this time I would like to turn the floor back over to Mr. Charles Bradley, for any additional or closing remarks.

Thank you. Again thank you all for attending the call. I think we are pleased with the quarter in a difficult economic environment and we think we’ve gotten a lot done lately that’s really put us in a much better position both within our industry and in terms of where we are going to go going forward. I think we’re now to the part where we can start looking at the opportunities and where we can do to sort of get us on that next level as we wait for this, the overall economy to sort of turn the corner, which hopefully will be soon than the later, but either way I think there is something that we can do that will be, worthwhile during that period of time. Like I said, probably the most important things is unfortunate in some ways and good in others. We’ve done this whole thing before, we have a lot of confidence in what we’re doing and a lot of good results have come out so far. So, we look we continue and as we go forward. So, thank you for attending, and I will talk to you next quarter.